Sapphire Foods India Limited has announced a significant reduction in its income tax demand following an order by the Income Tax Appellate Tribunal (ITAT), Mumbai. However, the Income Tax Department has now filed an appeal with the Bombay High Court challenging this favorable ruling. The disclosure was made to the stock exchanges on 24th April 2026 under Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The development follows the company's earlier intimation dated 26th June 2025 regarding the receipt of an order under Section 250 from the Office of the Commissioner of Income Tax, Appeal Addl/JCIT(A), Ranchi. The company had filed an appeal at the ITAT, Mumbai, which pronounced its order on 7th November 2025. The Order Giving Effect was subsequently passed by the Assistant Commissioner of Income Tax, OSD TDS Circle 2(2), Mumbai on 30th December 2025.

ITAT Ruling and Tax Demand Reduction

The ITAT, in its order dated 7th November 2025, held that the company cannot be treated as an "assessee in default" under Section 201(1) of the Income-tax Act, 1961, where the underlying tax has been subsequently deducted and deposited. The tribunal further ruled that interest under Section 201(1A) of the Income-tax Act, 1961 shall be restricted up to the date of actual payment of such taxes.

Pursuant to this order, the Assistant Commissioner of Income-Tax (TDS) passed an order giving effect to the ITAT ruling and raised a demand towards interest under Section 201(1A) amounting to INR 2.51 million, significantly lower than the original demand of INR 170.41 million.

Income Tax Department Appeals to Bombay High Court

The Income Tax Department (TDS) has filed an appeal under Section 260A of the Income Tax Act, 1961, with the Hon'ble Bombay High Court challenging the order passed by ITAT. The appeal pertains to assessment years 2016-17 and 2018-19 to 2023-24. The company stated that no settlement has been reached in the proceedings, and the matter remains sub-judice.

The company has confirmed that the appeal challenges the ITAT's favorable ruling that significantly reduced the tax demand. Despite the appeal, the current reduced demand of INR 2.51 million remains in effect unless overturned by the High Court.

Sapphire foods Mauritius Limited has filed a regulatory declaration with stock exchanges confirming no additional encumbrances on shares for the financial year ending March 31, 2026. The declaration was submitted on April 2, 2026, in compliance with SEBI regulations governing substantial acquisitions and takeovers.

Regulatory Compliance Declaration

The declaration was made pursuant to Regulation 31(4) of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011. The filing confirms that no other encumbrance on shares of Sapphire Foods India Limited has been made directly or indirectly, other than those already disclosed to the stock exchanges during the financial year ending March 31, 2026.

Stock Exchange Notification

The declaration was formally submitted to both major Indian stock exchanges where Sapphire Foods India Limited is listed. The notification was sent to the National Stock Exchange of India Limited and BSE Limited for official record purposes.

Corporate Governance

The declaration was signed by Faatimah Khodadeen, Director of Sapphire Foods Mauritius Limited, from Mauritius. This filing represents part of the company's ongoing compliance with SEBI's substantial acquisition and takeover regulations, ensuring transparency in share encumbrance matters for stakeholders and regulatory authorities.